Tabs

Wednesday, 10 June 2015

Lockers: The Future of last mile delivery

Consider this scenario a couple
of years ago even in the developed market. You order a product online to be
delivered at your residence. What would happen at the time of delivery of your
parcel if you are not at home?

Delivery
guy will probably call you & ask for instructions?

Drop
the parcel with the neighbors or take the parcel back & reattempt the
delivery probably at a later time or in all possibility on an alternate day.

This is a common scenario
especially among the urban dwellers, who fear either the package may not be
delivered or may be stolen if left unattended. This is a perfect nightmare for
any online store as well. Imagine the cost associated with the failed delivery
attempts in monetary terms as well as impact on the overall productivity. Add
to this other factors such as cost associated with handling customer calls
through customer service, dispatching a replacement item in case of lost item
or even potential loss of sale due to customer switching to alternate retailer.

To address these challenges
e-tailers have been working either on its own (Amazon) or closely with the
logistics solutions providers such as Singapore post, Finland’s Itella, InPost
Canada, Australia Post for building a network of smart lockers for delivery of parcels. It’s a win-win
situation for customers as well as sellers. This solution is helping the
etailers & logistics solutions providers not just to avoid the cases of
failed delivery attempts, but also with improved productivity due to multiple
deliveries at the same point resulting in reduced cost per delivery. Add to factors
such as lesser chances of a lost parcels, deliveries during the non-peak hours
resulting in avoiding the traffic congestion. Othe benefit being explored
simultaneously is, for the reverse logistics. Lockers also work as pick up
point for returned items.

How the lockers work?

Smart lockers are generally
installed in public places such as Malls, convenience stores such as
seven-eleven which are in the vicinity of the residential areas & often
visited by the natives for the daily needs. It has compartments of varying
sizes to accommodate wider variety of items & can typically handle items weighing
upto 10 pounds.

Once the parcel has been
delivered with the locker, automated tracking systems trigger the communication
over email or cellular phone as preferred by the customer. Mail or SMS sends
the details required of opening the lockers. Generally a passcode or QR code.
Some of the locker models are also using the Bluetooth connectivity feature for
added security.

Items are typically held in
lockers for about 3 days for the customer to pick up the items. The backend
system is designed for even reminding the customer for pickup of the items or
alternate instructions in case item cannot be picked up within the set time or
if customer wants the items to be returned to the seller.

While we all hear about the pilot
projects of deliveries using drones to address problems relating to cost,
traffic congestion, speed & agility, lockers have slipped in quietly into
those convenience stores & doing the job assigned to them with ease & offering
the convenience to the customers

Challenges

While the lockers are being
successfully implemented in developed nations where people shop online mostly
using internet banking & credit cards, it will be interesting to see how
this works in developing Asian markets such as South East Asia & Indian
subcontinent where preferred mode of payment is still cash on delivery.